Karachi industrialists announce production shutdown next week against gas price hike

A Pakistani employee fills a gas cylinder at a filling shop in Karachi on July 23, 2015. (AFP/File)
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Updated 01 December 2023
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Karachi industrialists announce production shutdown next week against gas price hike

  • On Oct. 31, Pakistan announced rise in natural gas prices for most households and industry ahead of IMF review
  • Industry leaders say gas tariffs for industry increased to about Rs2,600 per MMBtu, call for Rs1,350 per MMBtu

KARACHI: Pakistani industrialists in the country’s commercial hub of Karachi have announced a complete production shutdown on Monday, Dec.4, to force the government to reverse a hike in gas prices.

On Oct. 31, Pakistan announced a sharp increase in the price of natural gas for most households and industry ahead of the cash-strapped country’s first review of a $3 billion International Monetary Fund (IMF) bailout.

Gas tariffs for industry have increased to about Rs2,600 per Metric Million British Thermal Unit (MMBtu), which industry leaders say should be brought down to Rs1,350 per MMBtu, determined as the 100 percent cost of gas by the national regulator.

“The industrialists of Karachi have declared shutdown of all industries on Monday, December 4,” a representative body of industries in Sindh province, of which Karachi is the capital, said in a press release on Thursday.

“We announce that our protests have become stronger as Lasbela Chamber from Baluchistan [province] along with Nooriabad and Kotri Chambers have also joined our protest and assured to fully endorse all the strategies adopted by Karachi Chamber of Commerce and Industry (KCCI) to deal with the situation.”

Jawed Bilwani, vice chairman of the ruling Businessmen Group (BMG) at KCCI, said industries had already put up protest banners at the offices of all trade associations.

“The industry demands fair gas tariff of Rs1350 per MMBtu but would never accept the unbearable and unabsorbable gas tariffs ranging from Rs2100 to Rs2600 per MMBtu which have been imposed to … terribly penalize the industrial sector of the country that forms the backbone of the economy,” Bilwani said.

President SITE Association of Industry, Muhammad Kamran Arbi, said the new gas tariff was “simply unbearable” for industries, calling on the government to hold a meeting with industry stakeholders “to reach a consensus on the gas price since the existing tariff has outgrown the manufacturing costs.”

Last month, while announcing the hike in gas tariffs, Energy Minister Muhammad Ali said the tariff increase would generate nearly 400 billion rupees ($1.42 billion), adding that the state-run gas sector would from now on face no losses.

Energy sector debt has been the main issue that the IMF has highlighted in tackling the fiscal deficit and it has been recommending measures to deal with it.


Five dead, five injured as passenger bus catches fire in southwestern Pakistan

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Five dead, five injured as passenger bus catches fire in southwestern Pakistan

  • Bus caught fire in Quetta after colliding with qingqi rickshaw reportedly carrying petrol, says official
  • Balochistan government launches probe into incident, vows stern action against those responsible

ISLAMABAD: Five persons were killed and five others were injured in southwestern Pakistan on Tuesday after a passenger bus caught fire following its collision with a three-wheeled qingqi rickshaw, a senior official said. 

The incident took place on the Western Bypass road in Balochistan’s provincial capital Quetta, the provincial government’s spokesperson Shahid Rind said. He said the passenger bus caught fire after colliding with the qingqi, which was reportedly carrying petrol. 

“We express our heartfelt sympathy to the families of the passengers who died in the tragic accident,” Rind said in a statement. “The injured are being provided with immediate and best medical assistance.”

Three of the injured are being treated in the city’s Civil Hospital while two have been admitted to the Bolan Medical Complex, Rind said. 

He said the provincial government has started probing the incident, adding that strict action will be taken against all those found responsible for the accident once the investigation is completed. 

“All possible help and support will be provided to the affected families,” Rind said. 

Road accidents are frequent in southwestern Pakistan, where drivers often lack proper training and often disregard traffic rules and regulations. 

In April, 19 people were killed and over 40 injured in an oil tanker blast that took place in Balochistan’s Nushki district. 


Pakistan eyes final bidding for PIA by October, sale by year-end — privatization chief

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Pakistan eyes final bidding for PIA by October, sale by year-end — privatization chief

  • Muhammad Ali says local groups lead bidding now, but foreign firms could join later after turnaround
  • Government aims to retain minority stake in PIA to earn from future profits while giving private buyers full control

PAKISTAN: Pakistan plans to hold final bidding to sell its loss-making national airline by October and complete the sale by the end of this year, the country’s privatization czar said in an interview this week, in what would be Islamabad’s most serious effort yet to sell off Pakistan International Airlines (PIA) after decades of repeated failures and costly government bailouts.

The latest attempt comes as the government seeks to cut losses from state-owned firms that have drained the public purse and undermined economic stability for years. PIA, once a respected carrier in Asia, has been propped up by taxpayers for decades due to political interference, corruption and inefficiencies. Its privatization has also repeatedly collapsed amid union resistance, legal hurdles and low investor appetite.

Selling off unprofitable state companies has been a key demand of international lenders such as the International Monetary Fund (IMF), whose support is critical for Pakistan to avoid default and manage its ballooning debt.

Last week, five consortiums submitted expressions of interest for a 51–100 percent stake in PIA after the government restructured its balance sheet to make the deal more attractive. It has also scrapped the sales tax on leased aircraft and is providing limited protection from legal and tax claims. Around 80 percent of the airline’s debt has been transferred to the state.

“There are five expressions of interest from five different consortiums. Now we’ll be pre-qualifying them and all five may or may not qualify to go into the due diligence process,” Muhammad Ali, chairman of the Privatization Commission, told Arab News in an interview on Monday.

He said officials hoped to shortlist bidders by the end of June and open a data room in July.

“We are hoping that all the bidders will take roughly two months, 60 days time, for the due diligence and then we will enter into final discussions and negotiation of the terms and conditions of the transaction,” he said.

“So, we are hoping that sometime in September–October we should have the final bidding but in any case, before the end of the year we will wrap it up.”

WHY KEEP MINORITY SHAREHOLDING?

Pakistani state-owned enterprises post annual losses of more than Rs800 billion ($2.87 billion), and when subsidies, grants and other support are included, the burden swells beyond Rs1 trillion ($3.59 billion), Finance Minister Muhammad Aurangzeb told parliament while presenting the budget for fiscal year 2025–26 earlier this month.

PIA has been one of the government’s most costly liabilities, which has accumulated over $2.5 billion in losses in roughly a decade and been surviving on repeated bailouts that have weighed heavily on Pakistan’s strained budget. 

To attract buyers, Islamabad has moved PIA’s decades-old bank debt into a separate holding company, leaving a leaner core business with passenger, cargo and engineering operations, among others. 

“So, PIA, the aviation, the core company which we are privatizing, that doesn’t have that debt anymore,” Ali said. “So, after taking care of all of that, it will be a positive balance sheet that we will be passing on to the investor.”

Last week’s bids were submitted ahead of a June 19 deadline to acquire up to 100 percent of PIA, which, following a major restructuring effort, posted its first operating profit in 21 years in the year through June 2024.

When asked why the government wanted to keep a minority shareholding rather than sell the whole company, the privatization chief said it was to benefit financially if the airline improved after the sale.

“Frankly, the government is not interested in controlling this entity anymore,” Ali said. “If the government is very actively involved in the decision-making, then that spirit is not met. So, from a control element, we want the private sector to be totally authorized to take all the decisions.”

But once PIA turned around, “the government would want to make some money off it.”

“So, the government would like to keep 20 to 25 percent, that’s our wish list. But again, that depends on our final negotiations with the investors.”

The privatization chief also dismissed concerns that the PIA sale could face the same pitfalls as the government’s partial privatization of Pakistan Telecommunication Company Limited (PTCL) in 2006, when a 26 percent stake and management control were sold to UAE’s Etisalat. To date, the Abu Dhabi-listed operator has withheld $800 million because the government did not transfer title of some properties to PTCL as per the deal terms.

“In case of PIA, there is no issue as far as land title or anything like that is concerned,” Ali said, adding that unlike PTCL, the government would ensure the majority stake was fully transferred and proceeds are received upfront, while any residual stake would be sold later “when the time is right.”

WHAT PRICE TO EXPECT

A previous attempt to sell PIA failed when a $36 million bid from real estate firm Blue World City fell far short of the $305 million floor price for a 60 percent stake, amid concerns over debt, staffing and limited control. The government rejected the bid.

Ali said this time the reference price could be higher given that the airline was showing modest signs of recovery, resuming profitable European routes and hoping for UK clearance soon, which officials expect will lift revenues and support a stronger valuation.

But he insisted Islamabad would walk away again if the new bids fell short, noting that even private sector attempts to sell large assets often required multiple rounds.

“What we would want is we get our reference price or higher. And if we have to wait a bit, we will wait it out a bit,” he added.

“It’s a great asset, frankly. It’s not losing money, it’s making money … PIA is doing well, the Paris route is doing well, they keep adding the flights, we are hoping that the UK route will start … So, with every new route which opens up, PIA’s performance will keep getting better. So I wouldn’t be worried about that [low bids].”

While all five bids in this round are from local consortiums, with only one group including a non-resident Pakistani group from the United States, the privatization chairman said he was not concerned about the lack of foreign interest for now.

“We have this infatuation with trying to get foreign investors in every industry. I think we have to give it a thought... If a local group takes it, I’m very happy,” Ali said, adding that Pakistani buyers could later bring in foreign airline partners once the turnaround took hold.

Pakistan has pledged to reduce the drag of loss-making state firms on the budget as part of reforms tied to its latest $7 billion IMF bailout and to secure fresh external financing.

The government expects to raise about Rs86 billion — basically its last floor price for PIA — in privatization proceeds in the coming fiscal year starting in July, mainly from the national carrier and a few other transactions such as partial sales of power distribution companies and the Roosevelt Hotel in New York.

But with annual losses from inefficient state-owned enterprises estimated at more than Rs850 billion ($3 billion), the modest target underscores how few assets Islamabad realistically expects to offload in the near term.

“In order to get rid of this Rs850 billion loss to the exchequer, we need to have a very, very aggressive privatization and deregulation agenda,” Ali said, “whereby the market forces in the private sector focus on business and the government comes out of this. So it’s a long journey.”


Pakistan PM meets Saudi, Qatari envoys, vows to ‘work closely’ for Middle East peace

Updated 24 June 2025
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Pakistan PM meets Saudi, Qatari envoys, vows to ‘work closely’ for Middle East peace

  • Shehbaz Sharif meets Saudi, Qatari envoys hours after US President Donald Trump announces Iran-Israel ceasefire
  • Iran, Israel have been embroiled in conflict since June 13 when the latter attacked the former’s nuclear facilities

ISLAMABAD: Prime Minister Shehbaz Sharif met the ambassadors of Saudi Arabia and Qatar on Tuesday to discuss the rapidly evolving situation in the Middle East, vowing to “work closely” with Riyadh for peace in the region. 

Sharif met Saudi Ambassador Nawaf bin Said Al-Malki and Qatari envoy Ali Mubarak Ali Essa Al-Khater separately on Tuesday morning, hours after US President Donald Trump announced Iran and Isreal had agreed to a ceasefire. 

Trump announced the “complete and total” ceasefire between Tehran and Tel Aviv through a social media post on Tuesday, with the development taking place after Iran launched a limited missile attack Monday on a US military base in Qatar. Iran said the attack was in response to America’s move to target Tehran’s key nuclear facilities on Sunday. 

“I reaffirmed Pakistan’s unwavering solidarity with the brotherly people of Saudi Arabia,” Sharif wrote on social media platform X about his meeting with Al-Malki. “Pakistan will continue to work closely with the Kingdom of Saudi Arabia for peace in the region through dialogue and diplomacy.”

Sharif separately shared he also met Qatari envoy Al-Khater to express solidarity with the Gulf country following Iran’s attack on Monday night. 

“We pray for the safety and security of our Qatari brothers and sisters, and the entire region,” Sharif wrote. “Pakistan has always advocated dialogue and diplomacy as the only path to lasting peace in the Middle East.”

 

 

Iran has said that as long as Israel stopped its attacks early Tuesday morning, it would halt theirs. Meanwhile, Israel did not immediately acknowledge any ceasefire but there were no reports of Israeli strikes in Iran after 4 am local time.

Heavy Israeli strikes continued in Tehran and other cities until shortly before that time.

The conflict between the two Middle Eastern foes began on June 13 when Israel launched a surprising attack targeting Iran’s nuclear facilities and military leadership, saying they were aimed at preventing Tehran from acquiring nuclear weapons.  

Iran says its nuclear program is for peaceful and civilian purposes, and rejects Israel’s assertion that it wants to develop an atomic bomb. The two have traded frequent airstrikes and missiles since June 13. 

Pakistan has condemned Israel’s and America’s strikes against Iran and has repeatedly called for de-escalation in the region. Islamabad has offered diplomatic support to Tehran at international forums and has defended Iran’s right to respond to Israeli aggression under the UN Charter.


Islamabad says Iran-Israel conflict may trigger ‘refugee exodus’ into Pakistan, Afghanistan

Updated 24 June 2025
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Islamabad says Iran-Israel conflict may trigger ‘refugee exodus’ into Pakistan, Afghanistan

  • Pakistan shares a volatile, porous 900-kilometer-long border with Iran in southwestern region
  • Pakistan’s UN envoy says refugee exodus could imperil “already fragile” condition in Afghanistan

ISLAMABAD: Pakistan’s United Nations ambassador on Tuesday raised concerns about the possibility of a “refugee exodus” from Iran into neighboring Pakistan and Afghanistan, as tensions in the Middle East remain high despite the US announcing a ceasefire between Tehran and Israel. 

Pakistan shares a porous 900-kilometer-long border with Iran in its southwestern region, which is prone to militant violence and illicit activities such as smuggling. Analysts have warned that a long-term war between Israel and Iran, which began on June 13 after Tel Aviv attacked Iranian nuclear facilities, can lead to a large number of refugees heading toward Pakistan and other neighboring countries. 

However, hopes of calm returning to the region were spurred on after US President Donald Trump announced early Tuesday that Israel and Iran had agreed to a ceasefire. 

“We are also concerned about the potential destabilizing impact of the situation in Iran following unprovoked Israeli attacks,” Asim Iftikhar Ahmad, Pakistan’s permanent representative to the UN, said during a Security Council session.

“A refugee exodus into neighboring countries— including Afghanistan and Pakistan— could pose significant new challenges,” he said. “This might imperil the already fragile condition in Afghanistan.”

The Pakistani envoy was speaking on the prevalent situation in Afghanistan, including the lack of opportunities for women and the surge in militant attacks in the country. 

Ahmad said Islamabad wished to see a prosperous Afghanistan but warned that Pakistani Taliban fighters were operating from the country. He said that Pakistani Taliban or Tehreek-e-Taliban Pakistan (TTP) with around 6,000 fighters has safe havens close to the border with Pakistan, posing direct threat to Islamabad’s national security. 

“As part of our defensive measures, Pakistan has confiscated a significant cache of modern weapons originally left behind by international forces in Afghanistan,” Ahmad said. 

Afghanistan has repeatedly rejected Pakistan’s allegations that TTP fighters use its soil to launch attacks against Islamabad. Kabul has urged Pakistan to resolve its security challenges internally, without blaming Afghanistan. 

IRAN-ISRAEL CEASEFIRE

Trump announced the “complete and total” ceasefire between Tehran and Tel Aviv through a social media post on Tuesday, with the development taking place after Iran launched a limited missile attack Monday on a US military base in Qatar.

Iran said it was retaliating for the American bombing of its nuclear sites, adding that as long as Israel stopped its attacks early Tuesday morning, it would halt theirs.

Israel did not immediately acknowledge any ceasefire, but there were no reports of Israeli strikes in Iran after 4 am local time. Heavy Israeli strikes continued in Tehran and other cities until shortly before that time.

The US strikes against Iran over the weekend prompted fears of a wider regional conflict. Iran had said the US had crossed “a very big red line” with its risky gambit to strike with missiles and 30,000-pound bunker-buster bombs.

Pakistan has consistently denounced Israel’s military action against Iran and in Gaza, calling on the international community to intervene and impose an immediate end to the conflicts through dialogue and diplomacy. 


UK trade envoy visits Pakistan to promote investment, long-term economic cooperation

Updated 24 June 2025
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UK trade envoy visits Pakistan to promote investment, long-term economic cooperation

  • British envoy Mohammad Yasin begins three-day visit to Karachi, Islamabad, to “unlock new opportunities”
  • Yasin’s visit to pave the way for UK-Pakistan Trade Dialogue later this year, says British High Commission

ISLAMABAD: The United Kingdom’s Trade Envoy to Pakistan Mohammad Yasin has begun a three-day trip to Karachi and Islamabad cities to encourage investment and long-term economic cooperation between the two countries, the British High Commission said this week. 

Pakistan and the UK enjoy robust economic ties, with the UK being Islamabad’s largest export destination in Europe and third largest export destination globally. The UK has invested heavily in Pakistan’s financial services, oil & gas exploration, petroleum refining, electricity generation, pharmaceutical, publishing, industrial chemicals and cement sectors.

In a statement shared by the British High Commission, Yasin said that though the two nations enjoy close commercial ties, there is “much more we can achieve together.”

“It is a place close to my heart, and I have seen over many years the enormous potential to help both our countries prosper,” Yasin was quoted as saying on Monday. “During my visit, I look forward to supporting efforts that unlock new opportunities and drive growth.”

The commission said Yasin is expected to meet senior Pakistan government stakeholders including Commerce Secretary Jawad Paul, Federal Minister for Overseas Pakistanis Chaudhry Salik Hussain, and business leaders “to strengthen trade and encourage investment.”

“Mr. Yasin’s visit will help pave the way for the UK-Pakistan Trade Dialogue, due to launch later this year,” the commission said. “The Dialogue will offer a platform to grow exports, increase investment flows, address business environment concerns and identify opportunities for greater market access.”

The British High Commission noted that over 200 UK companies are operating in Pakistan, with the top five contributing around one percent of Pakistan’s GDP.

The visit takes place amid Pakistan’s push in recent months to forge stronger trade and investment relations with regional allies and friendly countries. The South Asian country is navigating a tricky path to economic recovery from a prolonged crisis that has drained its foreign exchange reserves and weakened its balance of payments position over the past three years.

Apart from the close ties the two countries enjoy, the UK is also home to a large Pakistani diaspora and a preferred destination for thousands of Pakistani students to pursue higher education opportunities.